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Money that you’ve earned is better off in your pocket. A qualified bankruptcy attorney can turn a horrible word like bankruptcy into a breath of fresh air for your financial woes. Remember that filing isn’t necessarily a bad thing for people who need it, as the process was created to provide relief.

The Different Types of Filings

Chapter 7 is beneficial for debtors that qualify and want to keep covered properties in exchange for manageable monthly payments. Almost all debts are completely wiped out. Debtors cannot legally contact you to make collections.

Chapter 13 is a court mandated payment plan for all financial problems, giving you three to five years to pay all debt back using new income. You have to pay back a portion of your debt, calculated by how much money you have available and how much you owe, back to creditors. With Chapter 13, there is more responsibility for repayment and continuing payment after the plan. This qualifies for both minor and major settlements.

Chapter 11 and 12 are used for businesses, allowing them to continue to operate without any harm to the business. This is beneficial on many fronts and happens more than you think. The latter is for farmers or commercial fishermen, allowing them to make payments on the season when it is more advantageous.

Student Loans and Tax Debt

Student loans and tax debt are both hard to eliminate. In court, you would have to prove ‘undue hardship,’ which means that you are completely unable to maintain the lowest standard of living if required to pay back tax debt or student loans. An example of undue hardship is if you become disabled.

Asking Questions That Matter

You cannot just claim bankruptcy; you have to go to a court and petition before a judge. A bankruptcy attorney can help you navigate this complicated process, ensuring the best possible outcomes. Many people are under the impression that bankruptcy will ruin their credit score. However, an attorney will tell you that the bankruptcy will remain on your credit report for ten years but will help you start rebuilding your credit almost immediately. A bankruptcy attorney can also help you keep your house. These laws are federal regulations, and cases are brought to federal courts, not state courts. Many states, however, have homestead exemptions that allow you to keep your house. A professional can help you interpret the laws in your state to protect your home and financial future.